Annual Report 2012-13

Transcription

SHANTHI GEARS LIMITED
Annual Report 2012-13
CONTENTS
Corporate Information
01
Directors’ Profile
02
Management Discussion and Analysis
03
General Shareholder Information
05
Corporate Governance Report
10
Directors’ Report
16
Auditors’ Report
21
Balance Sheet
26
Statement of Profit
27
Cash Flow Statement
28
Notes to Financial Statements
30
Cautionary Statement
Certain expectations and projections regarding the future performance of the Company referenced in the
annual report constitute forward-looking statements. These expectations and projections are based on
currently available competitive, financial and economic data, along with the Company’s operating plans and are
subject to certain future events and uncertainties, which could cause actual results to differ materially from
those indicated by such statements.
Message from the Chairman
Dear Shareholders,
It gives me immense pleasure to write to you and welcome you to be a part of the larger family – the Murugappa
Group. The last one year has been an exciting time for me personally, commencing with the conclusion of the
agreement to purchase 44.12% of the shares of your Company to being involved in shaping its direction and
future.
At the outset, I would like to record my appreciation of Mr. P Subramanian for creating, growing and guiding this
Company over the last four decades and being instrumental for the Company being acknowledged as one of the
best in the industry. I also wish to express my gratitude to the members who served on the Board of Directors of
Shanthi Gears Ltd for their guidance and counsel over the years.
Since the acquisition, building customer relationships and improving operational efficiencies have been the key
focus of the new team. This helped us post a turnover of ` 146 crores and a Profit before Tax of ` 22 crores in
FY2012-2013. The year was marked by a significant reduction in demand due to the depressed business
conditions prevailing in the industry. The investment climate was also not conducive leading to delays in
execution of large projects thereby impacting off-take.
As we embark on a new path leveraging brand “Shanthi”, adopting and integrating best practices, augmenting
our product range and improving our service we hope to enhance the value proposition to all our stakeholders.
Towards this, Shanthi’s main focus will be in the National market and key Industry segments like Steel, Cement,
Mining, Construction and Metro Rail. Shanthi’s strength lies in its engineering and design capabilities, a large skill
pool, state-of-the-art manufacturing infrastructure and the ability to innovate and re-engineer to provide
solutions to our customers. The Company intends to leverage these to serve the standard and customised
gearbox product segments.
Needless to mention, people make the difference and the team at Shanthi Gears, led by Dr. Sreeram Srinivasan,
through its commitment and diligence is making this possible. I thank all our employees and stakeholders for
their contribution and support and remain confident of their continued passion, enthusiasm and co-operation as
we progress into the future.
I also thank my colleagues on the Board for their valuable contribution and guidance to take Shanthi to new
heights of achievement.
Finally, my grateful thanks to you, the shareholders, for your continued support and confidence in the Company.
Sincerely,
MM Murugappan
10 Years Financials
` Crores
OPERATING RESULTS
2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04
Sales (Including excise duty)
160.94 186.67 173.46 129.07 276.90 274.73 227.97 184.26 138.07
97.54
Profit before Depreciation,
50.93
Interest & Tax (PBDIT)
Profit before Interest & Tax (PBIT) 22.36
69.32
71.48
53.14 103.20
94.61
74.16
58.77
41.62
28.00
42.10
44.64
26.21
77.43
72.15
55.93
46.06
32.04
19.69
Profit before Tax (PBT)
22.07
41.60
43.76
24.33
68.81
67.49
51.15
43.06
30.66
19.04
Profit after Tax (PAT)
15.47
28.13
27.86
16.18
44.06
44.16
33.59
28.06
19.12
13.25
Earnings Per Share in (`)
1.89
3.44
3.41
1.98
5.39
5.40
4.44
3.56
2.45
1.71
Dividend Per Share (`)
0.60
1.00
1.00
0.80
1.20
1.20
1.00
1.00
0.50
0.75
31.53
30.33
28.05
25.80
24.75
20.77
16.28
11.90
8.98
14.19
0.29
0.62
8.76
3.81
11.56
6.37
6.23
4.26
2.43
1.81
8.17
8.17
8.17
8.17
8.17
8.08
7.88
7.80
3.90
Reserves & Surplus
249.41 239.67 221.04 202.68 194.12 161.53 123.45
85.90
62.25
51.48
Net Worth
257.58 247.84 229.21 210.85 202.29 169.70 131.53
93.79
70.05
55.38
54.95
45.24
6.45
5.52
Book Value Per Share (`)
Interest
SOURCES AND APPLICATION OF FUNDS
SOURCES OF FUNDS
Share Capital
8.17
Debt
0.00
3.96
9.75
25.63
89.27
92.79 118.68 120.46
Deferred Tax Liability (Net)
6.88
10.73
14.26
17.49
20.09
19.06
Total
16.58
9.84
264.46 262.53 253.22 253.97 311.64 281.55 266.78 224.09 131.45 106.14
APPLICATION OF FUNDS
Gross Fixed Assets
361.09 360.21 353.46 344.13 338.60 299.19 265.20 191.18 142.05 116.45
Accumulated Depreciation
245.34 222.00 195.54 169.20 142.45 118.04
77.95
65.74
57.56
Net Fixed Assets
115.75 138.21 157.91 174.92 196.15 181.15 169.38 113.23
76.31
58.89
Capital Work-in-Progress
Short Term Investments &
Deposits
Net Working Capital
Total
95.81
3.62
5.59
7.54
5.17
7.07
16.16
13.19
8.65
3.86
0.00
90.60
55.02
46.00
27.50
47.50
15.84
18.13
47.51
7.50
3.90
54.49 63.71 41.77 46.38 60.92 68.40 66.07 54.71 43.78 43.34
264.46 262.53 253.22 253.97 311.64 281.55 266.78 224.09 131.45 106.14
RATIOS
PBDIT To Sales (%)
31.65
PBIT To Sales (%)
PBT To Sales (%)
PAT To Sales (%)
Interest Cover (times)
ROCE (%) #
37.14
41.21
41.17
37.27
34.44
32.53
31.90
30.14
28.71
13.89
22.55
25.73
20.31
27.96
13.71
22.28
25.23
18.85
24.85
26.26
24.53
25.00
23.21
20.19
24.57
22.44
23.37
22.21
19.52
9.61
15.07
16.06
12.54
15.91
16.07
14.73
15.23
13.85
13.58
175.62 111.81
8.16
13.95
8.93
14.85
11.90
13.80
17.13
15.47
12.86
20.29
21.54
11.57
29.32
27.15
22.49
26.08
25.85
19.26
Return on Networth (%)
6.01
11.35
12.16
7.67
21.78
26.02
25.54
29.92
27.30
23.93
Total Debt Equity Ratio
0.00
0.02
0.04
0.12
0.43
0.48
0.60
1.07
0.58
0.62
Long Term Debt Equity Ratio
0.00
0.00
0.02
0.05
0.08
0.13
0.18
0.30
0.02
0.06
Sales/Net Fixed Assets (times)
1.39
1.35
1.10
0.74
1.41
1.52
1.35
1.63
1.81
1.66
Net Working Capital
Turnover (times)
2.95
2.93
4.15
2.78
4.55
4.02
3.45
3.37
3.15
2.25
# Return on Capital Employed (ROCE) is Profit before Interest and Tax divided by the Capital Employed, excluding Short Term
Investments, as at the end of the year.
CORPORATE INFORMATION
BOARD OF DIRECTORS
M M MURUGAPPAN, Chairman
L RAMKUMAR
C R SWAMINATHAN
J BALAMURUGAN
V VENKITESWARAN
SREERAM SRINIVASAN, President &Executive Director
COMPANY SECRETARY
C SUBRAMANIAM
REGISTERED OFFICE
304-A, Trichy Road,Singanallur,Coimbatore-641005
PLANTS
A UNIT, Trichy Road,Singanallur, Coimbatore
B UNIT, Trichy Road,Singanallur, Coimbatore
C UNIT, Avanashi Road, Muthugoundenpudur, Coimbatore
D UNIT, K.Krishnapuram,Coimbatore
FOUNDRY DIVISION, Kannampalayam, Coimbatore
AUDITORS
S LAKSHMINARAYANAN ASSOCIATES
Chartered Accountants
BANKERS
State Bank of India
IDBI Bank Ltd
Bank of Nova Scotia
1
Directors’ Profile
Mr. M M Murugappan,
Chairman
Mr. V Venkiteswaran,
Non-Executive Director
Mr. M M Murugappan (57 years) holds a Masters
degree in Chemical Engineering from the University
of Michigan, USA. He is currently the Chairman of
Tube Investments of India Limited. He is also on the
Board of various companies including Mahindra &
Mahindra Limited and Wendt (India) Limited.
Mr. V Venkiteswaran (66 years) has business
experience of over 40 years in diverse areas of
operations. He is a Mechanical Engineer from the
University of Madras and worked over 36 years with
Tata Tea Limited and retired as Executive Director of
Tata Tea Limited.
Mr. C R Swaminathan,
Mr. J Balamurugan,
Mr. C R Swaminathan (65 years) holds a graduate
degree in Agriculture and a Masters degree in
Business Administration. He had been associated
with the PSG group of institutions as its Chief
Executive Officer. Mr. C R Swaminathan is well
experienced in the Foundry Industry and is the Past
President of the Institute of Indian Foundrymen. He
is also the Past President of the Confederation of
Indian Industry (Southern Region).
Mr. J Balamurugan (52 years) is an Electronics
Engineer from Regional Engineering College, Trichy.
He has also done the Management Programme for
Entrepreneurial Firms in Indian Institute of
Management, Bangalore. He has managing
experience in the businesses of IT infrastructure, online services and aftermarket automotive
enhancements and others. He was the past
Chairman of Confederation of Indian Industry,
Coimbatore Zone.
Mr. L Ramkumar,
Dr. Sreeram Srinivasan,
President & Executive Director
Mr. L Ramkumar (57 years) is a Cost Accountant and
has a Post Graduate Diploma in Management from
Indian Institute of Management, Ahmedabad. He is
currently the Managing Director of Tube
Investments of India Ltd. He has over 33 years of rich
and varied experience in management including 21
years in Tube Investments of India Ltd.
Dr. Sreeram Srinivasan (50 Years) holds a B.Tech.
degree from IIT, Madras and also holds a MS and
Ph.D from NC State University, Raleigh, USA. He has
over two and a half decades of rich and varied
experience, having worked for several leading multinational and Indian companies.
2
MANAGEMENT DISCUSSION AND ANALYSIS
The year 2012-13 witnessed a period of uncertainty across the globe. While the US economy showed signs of
recovery in the early part of the year, there were mixed signals as the year progressed. Europe is likely to take
some more time to return to normalcy. The Euro, as a common currency of Europe seems to be safe for now.
Growth in some key economies such as China has slowed. However, recent developments in Japan with the new
government appear to be positive.
The Indian economy too witnessed a year of gradual decline with the last quarter decline being particularly
severe. Poor monsoons, high inflation leading to high interest rates, slowdown in infrastructure projects and
overall drop in consumer confidence and supply side constraints led to the pace of growth coming down. Export
of products from India dipped and combined with the high import of oil and gold the current account deficit
became a matter of concern leading to a depreciating currency.
Review of business
Industry scenario
Your Company is in the business of design, manufacture, supply and servicing of gears and gear boxes. The
market size for these products is estimated to be around ` 3000 cr. The industry is growing at a rate of about 6%
per annum and is expected to touch about ` 4000 cr. in the next five years. Within the industry, there are certain
segments growing at a faster rate while a few are flat or declining. In the National Market, Steel, Cement, Sugar,
Mining, Paper, Marine make up the conventional part of this Industry while off-highway (Construction), Windmill
and Metro Rail constitute the relatively newer segments. The Metro and Off-highway segments are expected to
grow at almost twice the average of the industry growth while the Windmill segment is not expected to register
any growth at all in the next few years. There are five major players and a few regional players in the National
market while a significant portion of gearboxes for critical applications are met through imports. Exports
presents an opportunity for your Company but is limited at present due to the global economic scenario.
The National gearbox industry also constitutes two major segments, viz., standard and non-standard. Standard
gearboxes constitute about 35% of the market and growing approximately at over 10% CAGR while the
non-standard (customised) gear boxes constitute over 33% and growing below the Industry average. The
remainder of the industry is made up of loose gears and are growing at the Industry level. The industry is
witnessing a greater drive towards standardization thanks to the entry of multi-national players.
Industrial growth in general and infrastructure growth in particular present the opportunity for growth of the
gears and gearbox industry. Thus, import substitution by local players and overall economic growth would be the
drivers for growth in the gear and gearbox industry. The former would however entail acquisition or
development of technology from established players in the field. Skilled resources and state of the art facilities
are critical success factors in this industry.
3
Review of performance
Your Company has three focus areas: supply of internals and spares (loose gears), customised
non-standard gearboxes and servicing of any make of gearbox. The Company reported a revenue of
` 146 Cr. in the year under review against ` 172 Cr. in the previous year. The decline was largely due to the lower
demand for gearboxes, predominantly in the infrastructure related industries, significantly lower exports, and
lower servicing revenue. The Profit before Tax for the year was also lower at ` 22.07 cr. against ` 41.60 cr. due to
the lower turnover, higher input costs mainly on power which could not be recovered from customers and
intense competition in the various segments. During the year there were also one-time charges to the Profit &
Loss Account due to review and changes of certain accounting policies. This was consequent to the change in the
management. The Company has embarked on a program of improving its operational efficiencies and also
improving its cost base. These factors helped the Company partly mitigate the impact of the increased costs on
the bottom line.
There was also a strong focus on reduction of resources employed in the business both on working capital and on
fixed assets. This exercise helped in achieving a significant reduction in inventory holding. The Company
generated cash of ` 60 Cr. from operations and remains debt free. Investments in essential capital expenditure
towards enhanced productivity are ongoing.
The Company is focusing on developing a new range of products in the standard segment. These products are
expected to provide greater value to customers while enhancing our competitiveness in this segment. Efforts are
also on to enhance the range of planetary gear boxes. These gear boxes have made a positive impact on
customers and the demand for such products is set to increase.
The Company remains confident that the future is positive given the confidence of its customers on the
Company’s products and service and the fact that the government is seized of the need to stimulate growth.
Prospects of a better monsoon, lower inflation and reduction in interest rates could spur economic growth
during the current financial year.
Internal Control
The Company has an Internal Audit system commensurate with its size and operations. The internal audit is
carried out by a firm of chartered accountants covering all aspects of the business. The internal audit team
periodically evaluates the adequacy and effectiveness of internal controls. The Audit committee reviews the plan
for Internal Audit, significant internal audit observations and functioning of the internal audit department on a
periodical basis.
By Order of the Board
Chennai
th
30 April, 2013
Sreeram Srinivasan
4
General Shareholder Information
Registered Office
: 304-A, Trichy Road, Singanallur, Coimbatore-641005
Annual General Meeting
Day
Date
Time
Venue
:
:
:
:
Wednesday
th
24 July, 2013
2.00 P.M.
Registered Office of the Company
304-A, Trichy Road, Singanallur, Coimbatore-641 005
Financial Calendar
th
Annual General Meeting
Results for the Quarter Ending 30th June, 2013
Results for the Quarter Ending 30th September, 2013
st
Results for the Quarter Ending 31 December, 2013
st
Results for the Year Ending 31 March, 2014
Book Closure Date
24 July, 2013
24th July, 2013
23rd October, 2013
January/February, 2014
April/May, 2014
: 13th July, 2013 to 24th July, 2013 (Both days inclusive)
Dividend
The Board of Directors has recommended the payment of a final dividend of ` 0.60 per equity share. The
Dividend on equity shares will be paid to those members, whose names appear in the Register of Members on
Wednesday, 24th July, 2013 and the same will be paid on 29th July, 2013.
In respect of shares held in electronic form, dividend will be paid on the basis of beneficial ownership as per
details furnished by the depositories for the purpose.
Unclaimed Dividend
The details of dividend paid by the Company and the respective due dates of transfer of the
unclaimed/unencashed dividend to the Investor Education & Protection Fund (”IE&P Fund”) of the Central
Government are as below:
Financial Year to which dividend relates
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Date of declaration
14.07.2006
16.07.2007
14.07.2008
10.07.2009
13.08.2010
11.07.2011
23.07.2012
Due for Transfer to IE&P Fund
19.08.2013
21.08.2014
19.08.2015
15.08.2016
18.09.2017
16.08.2018
28.08.2019
As provided under the Companies Act, 1956, dividends remaining unclaimed for a period of seven years shall be
transferred by the Company to the IE&P Fund. In the interest of the investors, the company is in the practice of
sending reminders to the investors concerned, before transfer of unclaimed dividend to the IE&P Fund.
Unclaimed/unencashed dividends up to 2004-05 have been transferred to the IE&P Fund.
5
Instructions to Shareholders
(a) Shareholders holding shares in physical form
Requests for change of address must be sent to the Company’s Registrar & Transfer Agent viz., S.K.D.C.
Consultants Limited, Kanapathy Towers, 3rd Floor, 1391/A-1, Sathy Road, Ganapathy, Coimbatore-641006
(“RTA”), not later than 13th July, 2013 to enable them to forward the dividend warrants to the latest address of
Members. Members are also advised to intimate the RTA the details of their bank account to enable
incorporation of the same on dividend warrants. This would help prevent any fraudulent encashment of
dividend warrants.
(b) Shareholders holding shares in demat form
Shareholders can make use of the National Electronic Clearing Services (“NECS”) of Reserve Bank of India,
offered at select centres, to receive dividend payment directly into their bank account, avoiding thereby the
hassles relating to handling of physical warrants besides elimination of risk of loss in postal transit/ fraudulent
encashment of warrants. The NECS operates on the account number allotted by the Bank post Core Banking
Solution (“CBS”) implementation. The new Bank account number may kindly be intimated by the shareholder
to the Depository Participant (in case of the shares are held in demat mode) or to the Company’s RTA viz.,
S.K.D.C. Consultants Limited (in case the shares held in physical mode) by sending a request letter along with a
cancelled cheque, if not already done.
Listing on Stock Exchanges and Stock Code
National Stock Exchange of India Ltd
Bombay Stock Exchange
ISIN Number in NSDL & CDSL for equity shares
:
:
:
SHANTIGEAR
522034
INE 631A01022
The Company has paid annual listing fees for the financial year 2013-2014 in respect of the above stock
exchanges.
Stock Market Data
Month
Bombay Stock Exchange Limited (BSE) National Stock Exchange of India Limited (NSE)
High (`)
Low (`)
High (`)
Low (`)
April 2012
41.50
36.10
41.15
36.80
May 2012
53.35
36.70
53.45
36.50
June 2012
57.75
49.30
57.90
49.35
July 2012
69.60
50.50
69.50
50.70
August 2012
71.00
66.25
72.00
66.10
September 2012
75.50
69.50
75.75
69.25
October 2012
76.50
64.70
76.50
64.50
November 2012
67.95
50.25
68.00
50.00
December 2012
72.95
58.10
64.25
57.65
January 2013
72.40
60.60
72.50
60.00
February 2013
64.65
59.00
70.40
59.00
March 2013
61.75
53.50
61.75
53.50
6
Performance in comparison to broad based indices
SGL Share Performance (April 2012 to March 2013)
BSE Sensex Vs. SGL Share Price
Share Transfer System
The Company’s Shares are in the Compulsory Demat List and are transferable through Depository system. Both
Dematerialisation requests and physical share transfers are handled by S.K.D.C. Consultants Limited.
The Share transfers which are received in physical form are processed and the Share Certificates are returned
within 21 days from the date of receipt, subject to the Documents being valid and complete in all respects.
SEBI vide its circular dated 16th December, 2010 has amended clause 5A of the Listing agreement by laying down
a uniform procedure for dealing with unclaimed shares in physical mode and getting the same dematerialized
after completing the said procedure. The Company’s Registrar and Share Transfer Agent is in the process of
complying with the said amendment.
Registrar and Share Transfer Agents
S.K.D.C. CONSULTANTS LIMITED,
Kanapathy Towers, 3rd Floor, 1391/A-1,
Sathy Road, Ganapathy, Coimbatore-641006.
Tel
: (0422) 6549995, 2539835-836
Fax
: (0422) 2539837
Email
: info@skdc-consultants.com
7
st
Share holding pattern as on 31 March, 2013
SL. No.
Category
No. of Shares
% (Percentage)
57302913
70.12
1
Promoters
2
Mutual Funds, Banks, Financial Institution, Insurance Companies
2805714
3.43
3
Foreign Institutional Investors
1552000
1.90
4
NRI's / OCB's
800732
0.98
5
Private Corporate Bodies
2062002
2.52
6
Indian Public
17192492
21.05
Total
81715853
100.00
Distribution of Share holding as on 31st March, 2013
No. of Shares held
No. of Share holders
1 to 500
%
No. of Shares
%
13209
75.45
2066437
2.53
501 to 1000
1676
9.57
1429470
1.75
1001 to 5000
1993
11.39
5030411
6.15
5001 to 10000
416
2.38
2857963
3.50
10001 to 100000
188
1.07
4899445
6.00
100001 and above
24
0.14
65432127
80.07
17506
100.00
81715853
100.00
Total
Dematerialisation of Shares and Liquidity
st
As on 31 March, 2013, 79213873 shares were in dematerialized form representing 96.938% of total shares.
Location and time of Last Three Annual General Meetings held are given below
Financial Year Ending
31.03.2010
31.03.2011
31.03.2012
Date
13.08.2010
11.07.2011
23.07.2012
Time
Venue
10.00 A.M.
304-A, Trichy Road, Singanallur,
Coimbatore-641 005
9.30 A.M.
Coimbatore-641 005
9.30 A.M.
Coimbatore-641 005
8
Details of the Special Resolutions passed during the last Three Annual General Meetings are given below
Whether any Special
Resolution was passed
Date of AGM
Resolution
1) Alteration of Objects Clause of Memorandum of Association of
the Company
Yes
13.08.2010
2) To obtain the shareholders consent to commence Other Objects
Clause of Memorandum of Association of the Company.
Note: These two resolutions were passed by Postal Ballot and
results were declared at AGM
11.07.2011
No
Not Applicable
23.07.2012
No
Not Applicable
Resolution passed by Postal Ballot
No Resolutions were passed by postal ballot in the previous year.
Means of Communication
The quarterly/annual results are published in the leading national English newspapers (“Business
Line”/”Business Standard”) and in one vernacular (Tamil) newspaper (“Dinathanthi”/”Dinamani”).
The Quarterly/annual results are also available on the Company’s website,www.shanthigears.com
The Company’s website also displays shareholding pattern, compliance report on Corporate Governance,
corporate presentations, etc.,
Plant Locations
A Unit
B Unit
C Unit
D Unit
Foundry Division
:
:
:
:
:
304-A, Trichy Road, Singanallur, Coimbatore-641 005
304-F, Trichy Road, Singanalllur, Coimbatore-641 005
Avanashi Road, Muthugoundenpudur (PO), Coimbatore-641 406
K.Krishnapuram, Kamanaickenpalayam (PO), Coimbatore-641 658
Kannampalayam, Sulur via, Coimbatore-641 402
Contact Address
For all matters relating to investors Services
Compliance Officer
Mr. C Subramaniam
Company Secretary
Shanthi Gears Limited
304-A, Trichy Road
Singanallur, Coimbatore – 641 005.
Tel : (0422) 2273722 to 34
Fax : (0422) 2273884 & 85
Email: cs@shanthigears.com
S.K.D.C. CONSULTANTS LIMITED
rd
Kanapathy Towers, 3 Floor
1391/A-1, Sathy Road
Ganapathy
Coimbatore-641006
Tel : (0422) 6549995, 2539835-836
Fax : (0422) 2539837
Email: info@skdc-consultants.com
9
REPORT ON CORPORATE GOVERNANCE
1.
Company’s Philosophy of Corporate Governance
Your Company believes that the fundamental objective of corporate governance is to enhance the
interests of all stakeholders. The Company’s corporate governance practices emanate from its
commitment towards discipline, accountability, transparency and fairness. Key elements in corporate
governance are timely and adequate disclosure, establishment of internal controls and high standards
of accounting fidelity, product and service quality.
Your Company also believes that good corporate governance practices help to enhance performance
and valuation of the Company.
2.
Board of Directors
a)
The Board of Directors consists of 6 Directors as on 31st March, 2013, of whom 3 are Independent
Non- Executive Directors. A Non- Executive Chairman heads the Board.
b)
The Board of Directors met seven times during the financial year 2012-13. The dates of the Board
meetings were 25th May, 2012, 20th July, 2012, 30th July, 2012, 3rd September, 2012, 24th October,
2012, 30th January, 2013 and 27th March, 2013.
c)
There is no inter-se relationship between Directors.
d)
The attendance of each Director at the meetings, the last Annual General Meeting and number of
st
other Directorships/Committee memberships held by them as on 31 March, 2013 are as follows:
Sl.
No.
Name of Director
Board
meetings
attended
(No. of
meeting
held)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Mr. M M Murugappan (c)
Dr. Sreeram Srinivasan (c)
Mr. L Ramkumar (c)
(c)
Mr. C R Swaminathan
(c)
Mr. J Balamurugan
(d)
Mr. V Venkiteswaran
(e)
Mr. P Subramanian
Dr. D Padmanaban (e)
Mr. M J Vijayaraaghavan (e)
Mr. C G Kumar (e)
Mr. M Alagiriswamy (e)
4(4)
4(4)
4(4)
4(4)
4(4)
2(2)
4(4)
4(4)
4(4)
4(4)
4(4)
(a)
(b)
(c)
(d)
(e)
Number of
Number of
Committee
(a)
Directorships
Memberships (b)
excluding SGL
excluding SGL
(out of which
(out of which
as Chairman )
as Chairman )
11(8)
NIL
3(1)
2
4
1
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
5(4)
NIL
1
1
NIL
1
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Attendance
at last AGM
No. of Shares
st
held as on 31
March, 2013
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Present
Absent
Absent
Present
Present
5000
5000
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Excludes foreign companies, private limited companies, alternative Directorships and companies
registered under section 25 of the Companies Act, 1956
Includes only membership in Audit and Shareholders’/Investors’ Grievance Committee
Co-opted as Additional Director w.e.f. 3rd September, 2012
Co-opted as Additional Director w.e.f. 30th January, 2013
Resigned and relieved from the Board on 3rd September, 2012
10
3.
Audit Committee
The Audit Committee Consists of 4 Directors.
The terms of reference to the Audit Committee are wide enough to cover all matters specified under the
Listing Agreement and the Companies Act, 1956.
The Audit Committee met four times during the financial year 2012-13. The dates of the meetings were
24th May, 2012, 30th July, 2012, 24th October, 2012 and 30th January, 2013.
The Composition of the Audit Committee and attendance of each member at these meetings is as
follows:
Sl. No.
1
2
Mr. J Balamurugan
2(2)
(a)
4
8
2(2)
(a)
(b)
7
4.
Mr. C R Swaminathan, Chairman
Mr. M M Murugappan
6
(a)
(b)
(c)
(a)
3
5
No. of Meetings Attended ( No. of Meeting held )
Name of Member
2(2)
Mr. V Venkiteswaran
Not Applicable
(c)
Mr. M J Vijayaraaghavan
2(2)
(c)
Dr. D Padmanaban
2(2)
(c)
Mr. C G Kumar
Mr. M Alagiriswamy
2(2)
(c)
2(2)
rd
Co-opted as Member of the Committee w.e.f. 3 September, 2012
th
Co-opted as Member of the Committee w.e.f. 30 April, 2013
rd
Resigned and relieved from the Committee on 3 September, 2012
Remuneration paid to Chairman & Managing Director
rd
Mr. P Subramanian resigned from the Board on 3 September, 2012. ` 0.10 Crores was paid to him as
salary for the period from 01.04.2012 to 03.09.2012
5.
Remuneration paid to Non Executive Directors
No Remuneration is paid to Non Executive Directors except Sitting Fees payable for attending Board
Meetings/Committee Meetings which are as under.
Name of the Director
Mr. M M Murugappan
Mr. L Ramkumar
Mr. C R Swaminathan
Mr. J Balamurugan
Mr. V Venkiteswaran
Dr. D Padmanaban
Mr. C G Kumar
Mr. M Alagiriswamy
(Amount `)
Sitting Fees Paid
40,000
10,000
40,000
40,000
10,000
35,000
35,000
35,000
35,000
11
6.
Shareholders’/ Investors’ Grievance Committee
st
(a)
The Shareholders’/ Investors’ Grievance Committee consists of 3 Directors as on 31
March, 2013.
(b)
Composition of Shareholders’/ Investors’ Grievance Committee.
1
Members
Mr. L Ramkumar Chairman (a)
2
Mr. C R Swaminathan
3
Dr. Sreeram Srinivasan
4
Mr M J Vijayaraaghavan (b)
5
Dr. D Padmanaban
6
Mr. C G Kumar
7
Mr. M Alagiriswamy (b)
Sl. No.
(a)
(a)
(b)
(b)
rd
(a)
(c)
(d)
(e)
7.
Co-opted as Member of the Shareholders’ / Investors’ Grievance Committee w.e.f. 3
September, 2012
rd
(b) Resigned from the Shareholders’ / Investors’ Grievance Committee on 3
September, 2012
Compliance Officer
Mr. C Subramaniam, Company Secretary
Complaints
During the year 9 letters/complaints were received from the Investors, which were
replied/resolved to the satisfaction of the investors and none of the complaints is pending as on
date. None of the complaints required the attention of Investors Grievance Committee since
they were routine in nature and the same were resolved by the Company officials / RTA.
There was no Share Transfer and Dematerialisation pending as on 31st March, 2013.
The Company has exclusively designated an e-mail id for Investor Relations viz.,
cs@shanthigears.com
Remuneration Committee
(a)
The Remuneration Committee Consists of 3 Directors as on 31st March, 2013.
st
(b)
The Committee met two times during the year ended 31 March, 2013.
The Composition of the Remuneration Committee
Sl. No.
Name of Member
1
Mr. C R Swaminathan, Chairman (a)
2
3
4
5
6
7
Mr. J Balamurugan
2(2)
(a)
Mr. C G Kumar
2(2)
(a)
Mr. M M Murugappan
Dr. D Padmanaban
No. of Meetings Attended ( No. of Meeting held )
2(2)
(b)
Not Applicable
(b)
Not Applicable
(b)
Mr. M Alagiriswamy
Not Applicable
(b)
Not Applicable
rd
(a) Co-opted as Member of the Remuneration Committee w.e.f. 3 September, 2012
(b) Resigned and relieved from the Remuneration Committee on 3rd September, 2012
12
8.
CEO / CFO Certification under clause 41 and clause 49 of the Listing Agreement with Stock Exchanges
have been submitted to the Board by the CEO and CFO.
9.
a)
Disclosure on Materially significant related party transaction
The Company had not entered into any transaction of a material nature, which will have a conflict
with its interest during the year.
Full disclosure of related party transactions as per Accounting Standard 18 issued by the Institute
of Chartered Accountants of India is given under Note No. 35 of Notes to Financial Statements. All
the transactions covered under related party transaction were fair, transparent and at arms
length.
b)
There was no non-compliance by the Company, penalties, strictures imposed on the Company by
the Stock Exchanges, SEBI or any statutory authorities on any matter related to capital markets
during the last three years.
c)
The Company has not implemented a formal Whistle-blower policy. However, no personnel have
been denied access to the Audit Committee of the Company.
d)
The Company has implemented all mandatory requirements of clause 49 of the listing
agreement. Details of compliance with Non-mandatory requirements are given below.
I.
Chairman of the Board
A Non-Executive Chairman heads the Board.
ii.
Remuneration Committee
The Company has formed a Remuneration Committee. Details of the Committee
are given in point No. 7 of the report on Corporate Governance.
iii.
Audit Qualifications
The Financial Statements of the Company do not have any qualifications by Auditors.
10.
General Share Holders Information
A separate section has been annexed to the Annual Report furnishing various details viz., previous
Annual General Meetings, its time and venue, share price movement, distribution of shareholding,
location of factories, means of communication, etc., for shareholders reference.
On behalf of the Board
M M Murugappan
Chairman
Chennai
th
30 April, 2013
13
CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCT FOR BOARD
OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
To
The Members of Shanthi Gears Limited
This is to confirm that the Board has laid down a Code of Conduct for all Board members and Senior Management
of the Company. The Code of Conduct has also been posted on the website of the Company.
It is further confirmed that all Directors and Senior Management Personnel of the Company have affirmed
compliance with the Code of Conduct of the Company for the year ended 31st March, 2013, as envisaged in
Clause 49 of the Listing agreement with Stock Exchanges.
Sreeram Srinivasan
Chennai
30th April, 2013
14
AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE TO THE
MEMBERS OF M/S SHANTHI GEARS LIMITED
We have examined the compliance of the conditions of Corporate Governance by SHANTHI GEARS LIMITED for
st
the year ended 31 March, 2013 as stipulated in Clause 49 of the Listing Agreement of the said company, with the
stock exchanges.
The compliance of the conditions of Corporate Governance is the responsibility of the management. Our
examination has been limited to a review of the procedures and implementations thereof, adopted by the
Company for ensuring compliance with the conditions of Corporate Governance. It is neither an audit nor an
expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us, and the
representations made by the Directors and the management, we certify that the company has complied with the
conditions of Corporate Governance as stipulated in Clause 49 of the above-mentioned Listing Agreement.
We state that no investor grievance is pending for a period exceeding one month against the company as per the
records maintained by the Shareholders / Investor Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the company nor the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
Place: Chennai
Dated: 30th April, 2013
For S Lakshminarayanan Associates
Firm Reg. No.6609S
(S Lakshminarayanan)
Membership No: 012024
Partner
15
DIRECTORS’ REPORT TO THE SHAREHOLDERS
Your Directors have pleasure in presenting to you the performance of the Company, for the year ended 31st
March, 2013
FINANCIAL RESULTS
( ` Crores)
YEAR ENDED
31.03.2013
PARTICULARS
Revenue from Operations (Gross)
YEAR ENDED
31.03.2012
160.94
186.67
15.29
14.35
145.65
172.32
50.93
69.32
0.29
0.62
Depreciation & Amortisation Expense
28.57
27.10
Profit Before Tax
22.07
41.60
Less : Tax Expense
6.60
13.47
Profit After Tax
15.47
28.13
Add: Surplus brought forward
10.36
9.23
25.83
37.36
Transfer to General Reserve
5.00
17.50
Proposed Dividend
4.90
8.17
Tax on Dividend
0.83
1.33
15.10
10.36
Less : Excise Duty
Revenue from Operations (Net)
Earnings Before Interest, Tax, Depreciation & Amortisation
Finance Cost
Appropriations :
Balance carried to Balance Sheet
The year 2012-13 has been a landmark year for the Company. During this year the founder promoter of the
Company Mr. P Subramanian decided to retire from active Corporate Responsibilities and focus on his other
personal interests in the social sphere. Tube Investments of India Ltd (TII) acquired his entire stake and followed it
up with an Open Offer in line with the regulations and acquired another 26% from the general public. Effective
19th November, 2012 Shanthi Gears Ltd (SGL) became a subsidiary of TII. The Board wishes to place on record its
appreciation of the passionate and pioneering efforts by Mr. P Subramanian which helped build SGL into the
company as it now exists. The Board also wishes to place on record its appreciation of the services rendered by
the other members of the erstwhile Board of Directors of SGL for their valuable contribution to the growth and
success of SGL.
16
Review of Operations
During the year under review, the Company achieved a turnover of ` 146 crores as against ` 172 crores in the
previous year, a decline of 15%. The year 2012-13 was challenging in many respects. The economic growth levels
witnessed by the country in the previous years declined and the business sentiment remained largely negative.
Poor monsoons, high interest rates, low growth, slowdown in infrastructure projects and overall drop in
consumer confidence impacted the economy as a whole and consequently the sales of the Company as well. The
Profit Before Tax was at ` 22.07 cr. against ` 41.60 cr. in the previous year. The decline in profit was due to the
lower turnover, impact of input cost increases and higher fixed costs. The Company is focusing on enhancing
customer base, improving its operational efficiencies and cost management to mitigate the effect of these
factors. The benefit of these initiatives is expected to accrue in the current year.
Management Discussion and Analysis
The Management Discussion and Analysis, which forms part of the Annual Report, sets out an analysis of the
business, the industrial scenario and the performance.
Dividend
Your Directors recommend a Dividend of ` 0.60 per Equity Share of ` 1 each fully paid up.
Directors
Consequent to the acquisition of the Company by TII, the Board inducted the following Directors as additional
rd
Directors with effect from 3 September, 2012
Mr. M M Murugappan
Mr. L Ramkumar
Mr. C R Swaminathan
Mr. J Balamurugan
Dr. Sreeram Srinivasan
Mr. V Venkiteswaran was inducted as an additional Director with effect from 30th January, 2013.
All the above Directors are seeking appointment at the ensuing Annual General Meeting.
Effective 3rd September, 2012 Mr. P Subramanian, Mr. M J Vijayaraaghavan, Dr. D Padmanaban, Mr. C G Kumar and
Mr. M Alagiriswamy resigned from their position as Director. The Board wishes to thank them for their guidance
& contribution.
Corporate Governance
Your Company is committed to maintaining high standards of Corporate Governance. A report on Corporate
Governance, along with a certificate from the Statutory Auditors on compliance with Corporate Governance
norms forms a part of this report.
17
Human Resources
The HR strategy and initiatives of your Company are designed to effectively partner the business in the
achievement of it ambitious growth plans. During the few months since the take-over thrust has been on
creating a more effective organization, induction of new talent and building capabilities across the organization.
The Company had 581 permanent employees on its rolls, as on 31st March , 2013.
Social Commitment
As a corporate citizen, your Company is committed to the conduct of its business in a socially responsible
manner. The Company made a small contribution from its profit for the promotion of worthy causes like
education, healthcare, scientific research etc.
Auditors
M/s. S Lakshminarayanan Associates, the Statutory Auditors of the Company retire at the conclusion of the
ensuing Annual General Meeting. M/s. S Lakshminarayan Associates has expressed a desire not to seek
re-appointment at this meeting. The Board wishes to place on record its appreciation of the services rendered by
M/s. S Lakshminarayanan Associates as Statutory Auditors of the Company since its inception.
Mr. B Venkateswar, has been appointed as the Cost Auditor for audit of the Cost Accounting records for
st
Engineering products for the financial year ended 31 March, 2013. The Cost Audit report relating to the above
product will be filed within the stipulated period of 180 days from the close of the financial year.
The other information required to be furnished in the Directors’ Report under the provisions of Section 217 of
the Companies Act, 1956 relating to conservation of energy, technology absorption, foreign exchange earnings
and outgo, particulars of employees and Directors’ Responsibility Statement are annexed and form a part of this
Report.
The Directors thank all Customers, Vendors, Banks, Central & State Governments and Investors for their
continued support to your Company’s performance and growth. The Directors also wish to place on record their
appreciation of the contribution made by all the employees of the Company in delivering a good performance
during the year.
Chennai
th
30 April, 2013
M M Murugappan
Chairman
18
Annexure to the Directors’ Report
Directors’ Responsibility Statement
(Pursuant to Section 217 (2AA) of the Companies Act, 1956)
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief
confirm that:
st
•
in the preparation of the Statement of Profit for the financial year ended 31 March, 2013 and the Balance
Sheet as at that date (“financial statements”), applicable Accounting Standards have been followed.
•
appropriate accounting policies have been selected and applied consistently and such judgments and
estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of
affairs of the Company as at the end of the financial year and of the profit of the Company for that period.
•
proper and sufficient care has been taken for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities. To ensure this, the Company has established
internal controls systems, consistent with its size and nature of operations. In weighing the assurance
provided by any such system of internal controls its inherent limitations should be recognised. These
systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide
reasonable assurance of compliances with these systems. The Audit Committee meets at regular intervals
to review the internal audit function.
•
the financial statements have been prepared on a going concern basis.
•
the financial statements have been audited by M/s. S Lakshminarayanan Associates, Statutory Auditors and
their report is appended thereto.
M M Murugappan
Chairman
Chennai
30th April, 2013
19
Annexure to the Directors’ Report
Information under section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors’
Report:
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company is making continuous efforts to conserve and optimise energy wherever practicable by
economising on fuel and power.
During the year under review Electricity consumption has reduced when compared with the previous year.
Adoption of Compact Fluorescent Lamp (CFL) and Light Emitting Diode (LED) lamps, replacement of copper
chokes with electronic chokes, preventing leakages, providing better insulation and reduction of area under air
conditioning, load optimization and structured maintenance programs are some of the measures adopted to
conserve energy.
For the Company’s existing product line, there is no technical collaboration/arrangement.
Foreign Exchange Earnings and Outgo
(` Crores)
Earnings in Foreign Currency- FOB value of Exports
Outgo in Foreign Currency
10.85
1.45
Information under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975
There are no employees drawing salaries in excess of the limits prescribed under section 217 (2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended from time to
time.
Chennai
th
30 April, 2013
M M Murugappan
Chairman
20
Independent Auditor’s Report
To the Members of Shanthi Gears Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Shanthi Gears Limited (‘the Company’) which
st
comprise the Balance Sheet as at 31 March, 2013 the Statement of Profit and the Cash Flow Statement for the
year then ended and a summary of significant accounting policies and other explanatory information.
Mangement’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the company in accordance with the Accounting
Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956. (“the Act”) This
responsibility includes design, implementation and maintenance of internal control relevant to the preparation
and presentation of the financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with the Standards of Auditing issued by the Institute of Chartered Accountants of India.
Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An Audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances. An
Audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the
accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial
statements give the information required by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
st
(I)
in the case of the Balance Sheet, of the State of Affairs of the Company as at 31 March, 2013 ;
(ii)
in the case of the Statement of Profit, of the Profit for the year ended on that date ; and
(iii)
in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date
21
Report on Other Legal and Regulatory Requirements:
1.
As required by the Companies (Auditor’s Report) Order 2003 (“the Order “), as amended, issued by
the Central Government of India in terms of Subsection (4A) of Section 227 of the Act, we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of the order.
2.
As required by Section 227(3) of the Act, we report that
a)
We have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our Audit;
b)
In our opinion, proper books of account as required by law have been kept by the Company so
far as appears from our examination of those books;
c)
The Balance Sheet, Statement of Profit and Cash Flow Statement dealt with by this Report are
in agreement with the Books of Account;
d)
In our opinion the Balance Sheet, Statement of Profit and Cash Flow Statement comply with
the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies
Act, 1956 and
e)
On the basis of written representation received from the Directors as on 31 March, 2013 and
taken on record by the Board of Directors, we report that none of the Directors is disqualified
st
as of 31 March, 2013 from being appointed as a Director in terms of clause (g) of Subsection
(1) of Section 274 of the Companies Act, 1956.
st
Firm Reg. No.6609S
Partner
Place: Chennai
th
Dated: 30 April, 2013
22
Annexure to the Auditors’ Report :
The Annexure referred to in our report to the members of Shanthi Gears Limited (‘the Company’) for the year
ended 31st March, 2013. We report that:
(i)
(a) The Company has maintained proper records showing full particulars including quantitative details
and situation of its fixed assets.
(b) The fixed assets of the Company have been physically verified by the Management during the year
and no material discrepancies were noticed on such verification.
(c) The company has not disposed off substantial part of fixed assets.
(ii)
(a) The Stock in trade (including raw material) and stores, spare parts of the Company at all its locations
have been physically verified by the Management during the year.
(b) In our opinion, the procedures for physical verification of stock followed by the Management are
reasonable and adequate in relation to the size of the Company and nature of its business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification
between the physical stock and book records were not material.
(iii)
(a) The Company has not granted any loans, secured or unsecured, to companies, firms and other parties
listed in the register maintained under section 301 of the Companies Act, 1956.
(b) The Company has not taken any loans, secured or unsecured, from companies, firms and other
parties listed in the register maintained under section 301 of the Companies Act, 1956.
(iv)
(v)
In our opinion, the internal control procedures of the company relating to purchases of stores, raw
materials including components, plant & machinery, equipment and other similar assets and for sale
of goods & services are commensurate with its size and nature of its business. During the course of
our audit, we have not observed any continuing failure to correct major weakness in internal control
systems.
(a)
According to the information and explanations given to us, we are of the opinion that the particulars
of contracts or arrangements that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
(b)
In our opinion and according to the information and explanations given to us, the transactions in
pursuance of such contracts or arrangements have been made at prices which are reasonable having
regard to prevalent market prices at the relevant time.
(vi)
The company has not accepted any deposits from the Public during the year.
(vii)
In our opinion, the Company’s internal audit system is commensurate with its size and nature of its
business.
(viii)
We have broadly reviewed the cost records maintained by the Company pursuant to the Companies
( Cost Accounting Records ) Rules, 2011, prescribed by the Central Government under Section 209
(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records
have been maintained. We have, however, not made a detailed examination of the cost records with
a view to determining whether they are accurate or complete.
23
(ix)
(a)
The Company is regular in depositing with the appropriate authorities the undisputed statutory
dues relating to provident fund, employees state insurance, investor education protection fund,
income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material
statutory dues applicable to it.
(b)
According to the information and explanations given to us and the records of the company examined
by us there are no dues of income tax, wealth tax, cess and service tax, excise duty, customs duty
st
which have not been deposited on account of any dispute. Particulars of dues to sales tax as at 31
March 2013 which have not been deposited on account of any dispute, the amounts involved and
the forum where the dispute is pending are given vide annexure below.
SL.
No.
1
2
3
Name of the
Statute
Nature
of the Due
Tamil Nadu
Sales Tax
Act
Additional
Sales Tax on
Central
Sales Tax
Amount
(`)
1,17,718
Tamil Nadu
Sales Tax
Act
Additional
Sales Tax on
Central
Sales Tax
The Central
Excise Act
Excise Duty
Duty on Inter-Unit 76,16,281
transfer of
Penalty Machinery 76,16,281
1,04,013
Period
to which
the amount
relates
Forum where
the dispute
is pending
Remarks
Year Ended
31.03.1999
Assistant
Commissioner
Fast Track
Assessment Circle I,
Coimbatore
Tax Paid under
Protest and
Writ Petition
pending with
High Court,
Chennai
Year Ended
31.03.2000
Assistant
Commissioner
Fast Track
Assessment Circle I,
Coimbatore
Tax Paid under
Protest and
Writ Petition
pending with
High Court,
Chennai
NIL
The Appellate
Tribunal, South
Zonal Bench,
Chennai.
Duty not paid
(x)
The Company has no accumulated losses. The Company has not incurred cash losses during the financial
year covered by our audit and in the immediately preceding financial year.
(xi)
In our opinion and according to the information and explanations given to us, the company has not
defaulted in repayment of dues to financial institutions and banks.
(xii)
The Company has not granted loans and advances on the basis of security of pledge of shares, debentures
and other securities.
(xiii) The provisions of any special statute applicable to a chit fund/nidhi/mutual benefit fund/society are not
applicable to the company.
24
(xiv) The Company has maintained records on all transactions regarding purchase & redemption of mutual
funds. Timely entries have been made in such records and the investment in mutual funds was made in
company’s name.
(xv)
The Company has not given guarantees for loans taken by others from bank or financial institutions.
(xvi) The Company has not obtained any long-term loans during the year under report.
(xvii) According to the cash flow statement and other records examined by us and the information and
explanations given to us and on an overall examination of the balance sheet of the company, we report
that no funds raised on short term basis have been used for long term investment.
(xviii) The company has not made preferential allotment of shares to parties and companies covered in the
register maintained under section 301 of the Companies Act.
(xix) The company has not issued any debentures.
(xx)
The company has not raised funds by public issues during the year covered by our audit report.
(xxi) According to the information and explanations given to us and on the basis of our examination of books &
records of the company in accordance with the generally accepted auditing practices, no fraud on or by
the company has been noticed or reported during the year.
Firm Reg. No.6609S
Partner
Place: Chennai
Dated: 30th April, 2013
25
Balance Sheet
As At
31.03.2013
` Crores
As At
31.03.2012
2
3
8.17
249.41
8.17
239.67
(2) Non-current Liabilities
(a) Long term Borrowings
(b) Deferred Tax Liabilities (Net)
(c) Other Long Term Liabilities
(d) Long-term Provisions
4
5
6
6.88
0.09
0.10
10.73
0.09
0.30
(3) Current Liabilities
(a) Trade Payables
(b) Other Current Liabilities
(c) Short-Term Provisions
7
8
9
3.49
13.43
6.80
1.56
18.30
10.37
288.37
289.19
12
114.32
1.43
3.62
3.05
137.69
0.52
5.59
2.37
13
14
15
16
17
18
37.99
42.03
25.16
53.31
2.22
5.24
57.00
23.87
55.93
3.68
2.54
288.37
289.19
PARTICULARS
Note
No.
I. EQUITY AND LIABILITIES
(1) Shareholder's Funds
(a) Share Capital
(b) Reserves and Surplus
TOTAL
II. ASSETS
(1) Non-current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital Work-in-Progress
(b) Long-term Loans and Advances
10
11
(2) Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash and Cash Equivalents
(e) Short-term Loans and Advances
(f) Other Current Assets
TOTAL
Significant Accounting Policies
1
The Notes referred to above form an integral part of the Financial Statements
As per our report of even date
On Behalf of the Board
M M Murugappan
Chairman
Firm Reg.No 006609S
S Lakshminarayanan
Partner
F-012024
C Subramaniam
Company Secretary
Sreeram Srinivasan
Chennai
30th April, 2013
26
L Ramkumar
Director
Statement of Profit
Year Ended
31.03.2013
160.94
15.29
145.65
0.88
146.53
7.64
` Crores
Year Ended
31.03.2012
186.67
14.35
172.32
0.67
172.99
4.94
154.17
177.93
43.71
6.55
11.16
26.11
15.71
103.24
56.77
(4.79)
12.47
23.47
20.69
108.61
50.93
0.29
28.57
69.32
0.62
27.10
Profit Before Tax
22.07
41.60
Tax Expense
Income Tax
Current Year
Prior Years
Deferred Tax
10.90
(0.44)
(3.86)
17.02
(0.02)
(3.53)
Profit for the Year
15.47
28.13
1.89
1.89
3.44
3.44
Note
No.
19
Particulars
Revenue from Operations (Gross)
Less: Excise Duty
Revenue from Operations (Net)
Other Operating Income
20
Other Income
21
Total Revenue
Expenses
Cost of Materials Consumed
Change in Inventories of Finished Goods and Work in Process
Other Direct Manufacturing Expenses
Employee Benefits Expense
Other Expenses
Total
22
23
24
25
26
Earnings Before Interest, Tax, Depreciation & Amortisation
Finance Costs
Depreciation and Amortisation Expense
27
Earnings per Equity Share
Basic
Diluted
Significant Accounting Policies
1
The Notes referred to above form an integral part of the Financial Statements
M M Murugappan
Chairman
Firm Reg.No 006609S
S Lakshminarayanan
Partner
F-012024
C Subramaniam
Company Secretary
Sreeram Srinivasan
Chennai
30th April, 2013
27
L Ramkumar
Director
Cash Flow Statement
A
CASH FLOW FROM OPERATING ACTIVITIES
NET PROFIT BEFORE TAX AND EXTRAORDINARY ITEMS
Adjustments for :
Depreciation
Finance Cost
Interest Income
Dividend / Gain on redempton of Units in Mutual Funds
Profit on sale of fixed assets (net)
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES
Adjustments for:
(Increase) / Decrease in Trade and other Receivables
Decrease/(Increase) in Inventories
Increase / (Decrease) in Trade Payables and Other Payables
Changes in Working Capital
Cash Generated From Operations
Direct Taxes Paid
Net Cash Generated from Operating Activities
B
22.07
41.60
28.57
0.29
(5.46)
(0.94)
(0.83)
27.10
0.62
(4.17)
(0.31)
(0.04)
43.70
64.80
(1.63)
14.97
3.31
16.65
60.35
(11.29)
49.06
0.73
(13.46)
(4.62)
(17.35)
47.45
(19.17)
28.28
(6.71)
1.09
0.94
4.71
(8.09)
0.08
0.31
3.65
0.03
(4.05)
(0.29)
(3.95)
(8.15)
(1.33)
(0.62)
(5.80)
(8.11)
(1.33)
(13.72)
(15.86)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets
Proceeds from Sale of Fixed Assets
Dividend / Gain on redempton of Units in Mutual Funds
Interest Received
Net Cash from / (Used) in Investing Activities
C
Year Ended
31.03.2013
` Crores
Year Ended
31.03.2012
CASH FLOW FROM FINANCE ACTIVITIES
Finance Cost Paid
Proceeds from Borrowings
Dividend Paid
Tax on Dividend
Net Cash (used in) / generated from Financing Activities
D
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS
35.37
8.37
E
CASH & CASH EQUIVALENTS (OPENING)
st
st
as on 1 April, 2012 / 1 April, 2011
55.93
47.56
CASH & CASH EQUIVALENTS (CLOSING)
91.30
55.93
F
28
Cash Flow Statement (Contd.,)
Year Ended
31.03.2013
RECONCILIATION OF CASH AND CASH EQUIVALENTS WITH
THE BALANCE SHEET
Cash and cash equivalents as per balance sheet (Refer Note 16)
Current Investments considered as Cash Equivalents (Refer Note 13)
` Crores
Year Ended
31.03.2012
53.31
37.99
55.93
-
Total Cash & Cash Equivalents
Bank balances not considered as Cash and cash equivalents as defined in
AS 3 Cash Flow Statements
- Deposits for margin money
- Unpaid Dividend Accounts
91.30
55.93
(1.50)
(0.43)
(1.50)
(0.40)
Net Cash and Cash Equivalents (as defined in AS 3 Cash Flow Statements)
89.37
54.03
M M Murugappan
Chairman
Firm Reg.No 006609S
S Lakshminarayanan
Partner
F-012024
C Subramaniam
Company Secretary
Sreeram Srinivasan
Chennai
30th April, 2013
29
L Ramkumar
Director
1. Significant Accounting Policies
1.1. Accounting Convention
The financial statements of the Company are prepared under the historical cost convention, on an
accrual basis, in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP)
to comply with the Accounting Standards notified by the Government of India / issued by the Institute
of Chartered Accountants of India (ICAI), as applicable, and the relevant provisions of the Companies
Act, 1956. The accounting policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year.
1.2. Presentation and disclosure of financial statements
From the year ended 31st March, 2012 the revised Schedule VI notified under the Companies Act 1956,
has become applicable to the Company, for preparation and presentation of its financial statements.
The presentation and disclosures made in the financial statements are in accordance with the
requirements of the revised Schedule VI.
An asset has been classified as current when it satisfies any of the following criteria;
a)
It is expected to be realized in, or is intended for sale or consumption in, the Company’s normal
operating cycle;
b)
It is held primarily for the purpose of being traded;
c)
It is expected to be realized within twelve months after the reporting date; or
d)
It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability
for at least twelve months after the reporting date.
A liability has been classified as current when it satisfies any of the following criteria;
a)
It is expected to be settled in the Company’s normal operating cycle;
b)
It is held primarily for the purpose of being traded;
c)
It is due to be settled within twelve months after the reporting date; or
d)
The company does not have an unconditional right to defer settlements of the liability for at least
twelve months after the reporting date. Terms of a liability that could, at the option of the
counter-party, result in its settlement by the issue of equity instruments do not affect its
classification.
All other assets and liabilities have been classified as non-current.
1.3. Use of Estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management
to make estimates and assumptions considered in the reported amounts of assets and liabilities
(including contingent liabilities) as of the date of the financial statements and the reported income and
expenses like provision for employee benefits, provision for doubtful trade receivables / advances /
contingencies, provision for warranties, allowance for slow/non-moving inventories, useful life of fixed
assets, provision for taxation, etc., during the reporting year. The Management believes that the
estimates used in the preparation of the financial statements are prudent and reasonable. Future results
may vary from these estimates.
30
1.4. Tangible Fixed Assets
Fixed Assets are stated at historical cost less accumulated depreciation and impairment losses, if any.
Cost includes related taxes, duties, freight, insurance, etc. attributable to the acquisition and
installation of the fixed assets but excludes duties and taxes that are recoverable from tax authorities.
Borrowing costs are capitalised as part of qualifying fixed assets. Exchange differences arising on
restatement / settlement of long term foreign currency borrowings relating to acquisition of
depreciable fixed assets are recognized in the Statement of Profit and Loss.
Machinery spares which can be used only in connection with an item of fixed asset and whose use is
expected to be irregular are capitalised and depreciated over the useful life of the principal item of the
relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure
results in an increase in the future benefits from such asset beyond its previously assessed standard of
performance.
Fixed assets retired from active use and held for sale are stated at the lower of their net book value and
net realisable value and are disclosed separately in the Balance Sheet.
Capital Work-in-Progress: Projects under which assets are not ready for their intended use and other
capital work-in-progress are carried at cost, comprising direct cost and attributable interest.
1.5. Impairment of Assets
The carrying values of assets/cash generating units are reviewed at each Balance Sheet date to
determine whether there is any indication of impairment of the carrying amount of the Company’s
assets. If any indication exists, an asset’s recoverable amount is estimated. An impairment loss is
recognised whenever the carrying amount of the asset exceeds the recoverable amount. The
recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived
at by discounting the future cash flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognised for an asset in earlier accounting periods
no longer exists or may have decreased such reversal of impairment loss is recognised in the
Statement of Profit and Loss.
1.6. Investments
a)
Investments, which are readily realisable and intended to be held for not more than one year
from the date on which such investments are made, are classified as Current Investments. All
other investments are classified as Non-Current investments.
b)
Non-Current investments are carried at cost. Diminution in the value of such investments, other
than temporary, is provided for.
c)
Current investments are carried at lower of cost and fair value.
1.7. Inventories
a)
Raw materials, stores & spare parts and traded goods are valued at lower of weighted average
cost (net of allowances) and estimated net realisable value. Cost includes freight, taxes and
duties and is net of credit under VAT and CENVAT scheme, where applicable.
31
1.8.
1.9.
b)
Work-in-process and finished goods are valued at lower of weighted average cost (net of
allowances) and estimated net realisable value. Cost includes all direct costs and appropriate
proportion of overheads to bring the goods to the present location and condition.
c)
Due allowance is made for slow/non-moving items, based on Management estimates.
Revenue and Other Income
a)
Sales are recognised on shipment or on unconditional appropriation of goods and comprise
amounts invoiced for the goods, including excise duty, but excluding Sales Tax/Value Added Tax.
b)
Service revenues are recognised when services are rendered.
c)
Dividend income is accounted for when the right to receive it is established as on the date of
Balance Sheet.
d)
Interest Income is recognised on time proportion basis.
Government Grants, Subsidies and Export Incentives
Government grants and subsidies are recognised when there is reasonable assurance that the
Company will comply with the conditions attached to them and the grants/subsidy will be received.
When the grant or subsidy from the Government relates to revenue, it is recognised as income on a
systematic basis in the statement of profit or loss over the period necessary to match them with the
related costs, which they are intended to compensate.
When the grant or subsidy from the Government is in the nature of promoters’ contribution, where
no repayment is ordinarily expected in respect thereof, it is credited to Capital Reserve and treated as
a part of the Shareholders’ funds on receipt basis.
Export benefits are accounted for in the year of exports based on eligibility and when there is no
uncertainty in receiving the same.
1.10. Employee Benefits
I.
Defined Contribution Plan
a.
Provident Fund
Contributions are made to the Regional Provident Fund in accordance with the fund rules.
The interest rate payable to the beneficiaries every year is being notified by the
Government.
II.
Defined Benefit Plan
Gratuity
The Company makes annual contribution to a Gratuity Fund administered by trustees and
managed by LIC. The Company accounts its liability for future gratuity benefits based on actuarial
valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit
method. Actuarial gains/losses are immediately recognised in the Statement of Profit and Loss.
32
III. Short Term Employee Benefits
Short term employee benefits includes short term compensated absences which is recognized
based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based
on the terms of the employment contract.
IV. Voluntary Retirement Scheme
Compensation to employees under Voluntary Retirement Schemes is expensed in the period in
which the liability arises.
1.11. Operating Leases
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased assets are classified as operating leases. Operating lease payments are recognised as an
expense in the revenue account as per the lease terms.
1.12. Foreign Currency Transactions
Initial recognition
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely approximate the rate at the date of
the transaction.
Measurement
Foreign currency monetary items (other than derivative contracts) of the Company outstanding at
the Balance Sheet date are restated at year end exchange rates.
Non-monetary items are carried at historical cost.
Treatment of exchange differences
Exchange differences arising on settlement/restatement of short-term foreign currency monetary
assets and liabilities of the Company are recognised as income or expense in the Statement of Profit
and Loss.
Accounting of forward contracts
The Company enters into forward exchange contracts and other instruments that are in substance a
forward exchange contract to hedge its risks associated with foreign currency fluctuations. The
premium or discount arising at the inception of a forward exchange contract (other than for a firm
commitment or a highly probable forecast transaction) or similar instrument is amortised as expense
or income over the life of the contract. Exchange differences on such a contract are recognised in the
Statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising
on cancellation of such a contract is recognised as income or expense for the year.
33
1.13. Depreciation and Amortisation
st
Till the year ended 31 March, 2012 the Company followed a policy of providing for Depreciation as
follows:
With respect to Plant & Machinery purchased and commissioned for the year ended 30/06/1978
to 30/11/1987 and on Buildings for the period ended 30/11/1986 and for the year ended
30/11/1987 on equated number of years.
With respect to Plant & Machinery and Buildings added during the accounting period ended
31/03/1989 and onwards on the Straight Line Method as per the rates prescribed under Schedule XIV
of the Companies Act, 1956.
With respect to all other assets based on the Written Down Value method at rates prescribed under
Schedule XIV of the Companies Act, 1956.
st
The Company has decided to change the method of providing for Depreciation, effective 1 April,
2012, in accordance with the Straight Line Method as per the rates prescribed in Schedule XIV to the
Companies Act, 1956 except in respect of the following categories of assets, where depreciation is
provided based on useful life of the assets assessed as under:
Description of Assets
Useful life and Basis of depreciation/amortisation
Furniture and fixtures
Motor cars
Office Equipment
(including Data Processing Equipment)
Individual fixed assets whose actual cost
does not exceed ` 5000/Computer Software
5 Years
4 Years
3 Years
Fully depreciated in the year of
acquisition
3 years
Depreciation is provided pro-rata from the day of Capitalisation.
The Company also has a system of providing additional depreciation, where, in the opinion of the
Management, the recovery of the fixed asset is likely to be affected by the variation in demand and/or
its condition/usability.
1.14. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year and is determined in
accordance with the provisions of the Income Tax Act, 1961.
Deferred tax is recognised on timing differences; being the differences between taxable income and
accounting income that originate in one period and are capable of reversal in one or more
subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised
only if there is virtual certainty that there will be sufficient future taxable income available to realise
such assets. Other deferred tax assets are recognised if there is reasonable certainty that there will be
sufficient future taxable income available to realise such assets.
34
1.15. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when there is a present obligation as a result of past events and when a
reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i)
Possible obligation which will be confirmed only by future events not wholly within the control of the
Company or (ii) Present obligations arising from past events where it is not probable that an outflow
of resources will be required to settle the obligation or a reliable estimate of the amount of the
obligation cannot be made. Contingent assets are not recognised in the financial statements since
this may result in the recognition of income that may never be realised.
2. Share Capital
31-03-2013
.
10.00
Authorised
10,00,00,000 Equity Shares of ` 1/- each
Issued Subscribed and fully Paid-Up
8,17,15,853 Equity Shares of ` 1/- each
a)
8.17
` Crores
31-03-2012
10.00
8.17
Reconciliation of Share Capital:
Shares outstanding as at 1st April, 2012 and 31st March, 2013 – 8,17,15,853
b)
Terms / Rights attached to class of shares
The Company has only one class of shares referred to as equity shares having a par value of ` 1/-.
The holders of equity shares are entitled to one vote per share.
c)
Details of Shareholder(s) holding more than 5 Percent of equity shares in the Company as on
st
31 March, 2013
No of Shares
Shareholder
Tube Investments of India Ltd (Holding Company)
HDFC Standard Life Insurance Company Ltd
Mr. P. Subramanian
Shanthi Social Services
35
31-03-2013
5,72,96,413
-
31-03-2012
41,09,754
2,82,50,291
71,00,000
3. Reserves and Surplus
` Crores
31-03-2013
31-03-2012
Capital Reserves (` 16,700)
0.00
0.00
Capital Redemption Reserve
0.02
0.02
Securities Premium Account
24.29
24.29
205.00
187.50
5.00
17.50
210.00
205.00
Opening Balance
10.36
9.23
Profit for the year
15.47
28.13
25.83
37.36
Transfer to General Reserve
(5.00)
(17.50)
Proposed Dividend – ` 0.60 per share (PY ` 1/- per share)
(4.90)
(8.17)
Tax on Proposed Dividend
(0.83)
(1.33)
Closing Balance
15.10
10.36
Total Reserves & Surplus
249.41
239.67
General Reserve
Opening Balance
Transfer from surplus in Statement of Profit
Closing Balance
Surplus in Statement of Profit
4. Deferred Tax Liabilities (Net)
st
The net deferred tax liability of ` 6.88 Cr. as at 31 March, 2013 (Previous Year ` 10.73 Cr.) has arisen on
account of the following:
a)
Deferred Tax Liabilities
Depreciation on Fixed Assets
b) Deferred Tax Assets
Employee Benefits
Net Deferred Tax Liabilities
9.02
13.16
2.14
6.88
2.43
10.73
0.03
0.06
0.09
0.03
0.06
0.09
5. Other Long Term Liabilities
Payable on Purchase of Fixed Assets
Rental Deposits
Total
36
6. Long Term Provisions
Provision for warranty is recognised based on past experience of claims received during the warranty period
provided by the Company.
` Crores
31-03-2013
31-03-2012
Provision for Warranty
At the beginning of the year
0.30
0.30
Add: Provision created during the year
0.03
0.05
0.33
0.35
Less: Utilised during the year
0.03
0.05
Less: Provision no longer required written back
0.20
At the end of the year
0.10
0.30
7. Trade Payables
Dues to Micro, Small & Medium Enterprises
Goods & Services
Total
3.49
3.49
1.56
1.56
Based on, and to the extent of information received from the suppliers regarding their status under the
Micro, Small & Medium Enterprises Development Act, 2006 (MSMED Act), and relied upon by the Auditors,
there are no dues to such suppliers.
8. Other Current Liabilities
Current Maturities of Long Term Debt
Advances from customers
Unpaid Dividends
Un-encashed Fixed Deposits including Interest
Statutory Liabilities
Creditors for Capital Goods
Others *
Total
7.57
0.43
0.14
0.22
5.07
13.43
3.96
7.02
0.40
0.00
0.13
2.55
4.24
18.30
1.01
0.06
4.90
0.83
6.80
0.87
8.17
1.33
10.37
*Includes amount due to Holding Company – ` 0.66 Cr. (Net of Tax)
9. Short Term Provisions
Provision for Compensated Absences
Provision for Wealth Tax
Proposed Dividend
Dividend Distribution Tax
Total
37
38
10. Tangible Assets
` Crores
39
11. Intangible Assets
` Crores
12. Long Term Loans and Advances
(Unsecured, Considered Good)
31-03-2013
` Crores
31-03-2012
Capital Advances
0.47
0.39
Security Deposits
0.97
0.77
Loans & Advances to Employees
0.23
0.66
Advance Income Tax (Net of Provision)
1.32
0.49
Rental Advances
0.06
0.06
Total
3.05
2.37
13. Current Investments
Particulars
Nominal Value
` Crores
31-03-2012
31-03-2013
No of Units
Value
No of Units
Value
DSP Blackrock Liquidity
Fund – Direct Plan –
Daily Dividend
1000
30186.66
3.02
-
-
HSBC Cash Fund –
Daily Dividend
Direct Plan
1000
20089.84
2.01
-
-
10
12556829.73
13.36
-
-
100
301967.04
3.02
-
-
SBI Premier Liquid Fund –
Regular Plan –
Daily Dividend
1000
97522.33
9.78
-
-
UTI – Treasury Advantage
Daily Dividend
1000
68003.59
6.80
-
-
HDFC Cash Management
Daily Dividend
ICICI Prudential Liquid
Direct Plan –
Daily Dividend
37.99
Total
Notes:
During the year, the Company has invested an aggregate of ` 80.31 Cr.(Previous Year ` 46 Cr.) and redeemed
an aggregate of ` 44.59 Cr. (Previous Year ` 46 Cr.) of units in various Cash Management Schemes of Mutual
Funds, invested for the purpose of deployment of temporary cash surpluses.
40
14. Inventories
(Lower of Cost (Net of Allowances) and estimated Net Realisable Value)
Raw Material and Consumables
Semi Finished Goods
Finished Goods
Total
31-03-2013
18.01
21.65
2.37
42.03
` Crores
31-03-2012
26.42
27.04
3.54
57.00
4.69
20.47
25.16
5.03
18.84
23.87
0.05
0.06
0.22
51.11
1.50
0.43
53.31
0.45
53.52
1.50
0.40
55.93
0.47
0.28
1.47
2.22
0.06
0.31
3.31
3.68
1.54
3.70
5.24
0.79
1.75
2.54
15. Trade Receivables
Outstanding for a period exceeding six months from the day
they are due for payment
Others *
Total
* Includes an amount of ` 0.03 Cr. (PY NIL) receivable from Holding Company
16. Cash and Cash Equivalents
Cash on Hand
Balance with Banks
Current Accounts
Fixed Deposit Accounts
Fixed Deposit Accounts held as Margin Money
Unpaid Dividend Accounts
Total
17. Short Term Loans and Advances
Advances recoverable in cash or kind or for value to be received
Goods & Services
Prepaid Expenses
Balance with Government Authorities
Total
18. Other Current Assets
Interest Accrued on Deposits
Receivable from Statutory Authorities
Total
41
19. Revenue from Operations (Gross)
31-03-2013
154.69
4.32
1.93
160.94
` Crores
31-03-2012
181.16
4.76
0.75
186.67
0.87
0.01
0.88
0.67
0.67
5.35
0.00
0.15
0.83
0.35
0.75
0.19
0.02
7.64
4.08
0.00
0.28
0.04
0.23
0.31
0.00
4.94
Closing Stock
Cost of Material Consumed
26.42
35.30
61.72
(18.01)
43.71
17.75
65.44
83.19
(26.42)
56.77
Cost of Material Consumed comprises of:
Steel Rods & Forgings
Bearings
Other items (not exceeding 10% of total consumption)
Total
15.01
6.08
22.62
43.71
16.93
5.81
34.03
56.77
Sale of Products
Sale of Services – Machining Charges
Sale of surplus energy
Total
20. Other Operating Income
Sale of scrap
Duty Drawback
Total
21. Other Income
Interest Income
Fixed Deposits with Banks
Overdue receivable from customers
Others
Profit on Sale of Assets (Net of Loss on Sale ` 0.06 Cr.)
Rental Income
Dividend Income from Mutual Funds
Gain on Redemption of Units in Mutual Funds
Exchange Fluctuation (Net)
Total
22. Cost of Materials Consumed
Opening Stock
Purchases
42
23. Changes in Inventories of Finished Goods and Work in Process
31-03-2013
` Crores
31-03-2012
Work-in-Process
27.04
23.77
Finished Goods
3.54
2.02
30.58
25.79
Work-in-Process
21.66
27.04
Finished Goods
2.37
3.54
24.03
30.58
6.55
(4.79)
Power, Fuel & Water
8.45
8.30
Conversion Charges
2.71
4.17
11.16
12.47
22.51
20.06
Contribution to Provident & Other Funds
1.60
1.27
Welfare Expenses
2.00
2.14
26.11
23.47
Opening Stock
Closing Stock
Depletion / (Accretion) to Stock
24. Other Direct Manufacturing Expenses
Total
25. Employee Benefits Expense
Salaries, Wages & Bonus
Total
43
26. Other Expenses
Consumption of Stores & Spares
Rent
Managing Directors Remuneration
Repairs & Maintenance – Building
Repairs & Maintenance – Machinery
Repairs & Maintenance – General
Insurance
Rates & Taxes
Travelling & conveyance
Printing stationery & Communication
Freight, Delivery & shipping Charges
Commission on Sales
Discounts/Incentives on Sales
Trade Receivable Debts Written Off
Advertisement & Publicity
Auditors’ Remuneration
Directors’ sitting Fees
Loss on Exchange Fluctuation (Net)
Bank Charges
Donations to Charitable & Other Institutions
Administration & Other Expenses
Total
31-03-2013
0.13
0.15
0.10
0.53
4.32
2.61
0.20
1.17
1.08
0.61
0.84
0.77
0.71
0.69
0.06
0.03
0.32
0.14
1.25
15.71
` Crores
31-03-2012
0.15
0.07
2.19
0.77
5.25
3.08
0.14
1.04
1.00
0.54
0.70
0.42
0.56
0.09
2.39
0.05
0.01
0.97
0.39
0.03
0.85
20.69
0.04
0.01
0.00
0.03
0.01
-
0.01
0.00
0.00
0.06
0.01
0.00
0.05
0.19
0.10
0.29
0.51
0.11
0.62
Auditors’ Remuneration
As Auditor
Audit Fee
Tax Audit Fee
Limited Review
In Other Capacity
Taxation Matters
Other services
Reimbursement of Expenses
Total
27. Finance Costs
Interest Expense
Other Borrowing Costs
Total
44
28. Commitments and Contingent Liabilities
Commitments
Estimated amount of contracts remaining to be executed on Capital
Account and not provided for
Contingent Liabilities
Bills Discounted
Claims against the Company not acknowledged as debt
31-03-2013
` Crores
31-03-2012
2.06
3.02
7.25
1.91
7.25
Note:
Show Cause Notices received from various Government Agencies pending formal demand notices have not
been considered as contingent liabilities.
29. Imported and Indigenous Materials Consumed
Consumption of Raw Materials (Refer Note 22)
Imported
Indigenous
Total
31-03-2013
` Crores
%
1.58
0.69
98.42
43.02
100.00
43.71
31-03-2012
` Crores
%
3.08
1.75
96.92
55.02
100.00
56.77
30. Value of Imports on CIF Basis
Raw Material
Consumable Stores & Tools
Spares
Capital goods
Total
0.54
0.19
0.09
0.82
0.88
1.06
0.48
0.14
2.56
10.85
20.06
0.19
0.10
0.34
0.63
0.50
0.27
0.04
0.10
0.91
31. Earnings in Foreign Exchange
FOB value of exports
32. Expenditure in Foreign Currency
Interest on Foreign Currency Loans
Advertisement
Technical Consultancy Charges
Others
Total
45
33. Employee Benefits under Defined Benefit Plans
GRATUITY
Details of Actuarial Valuation
Change in Benefit Obligation
Projected Benefit Obligation as at Year Beginning
Service Cost
Interest Cost
Actuarial (Gains) / Losses
Benefits Paid
Projected Benefit Obligation as at Year End
Change in Plan Assets
Fair Value of Plan Assets as at Year Beginning
Expected Return on Plan Assets
Actuarial (Gains) / Losses
Employer's Contribution
Benefits Paid
Fair Value of Plan Assets as at Year End
Amounts Recognised in the Balance Sheet
Projected Benefit Obligation at the Year End
Fair Value of the Plan Assets at the Year End
Asset Recognised in the Balance Sheet
Cost of the Defined Benefit Plan for the year
Current Service Cost
Interest on Obligation
Expected Return on Plan Assets
Net Actuarial (Gains) / Losses Recognised in the Year
Net Cost Recognised in the Profit and Loss Account
Other Disclosures
Benefit
Projected Benefit Obligation
Fair Value of Plan Assets
Surplus / (Deficit)
Discount Rate
Future Salary Increase
Attrition Rate
Expected Rate of Return on Plan Assets
2012-2013
` Crores
2011-2012
2.99
0.26
0.24
0.10
-0.08
3.51
2.29
0.27
0.18
0.26
-0.01
2.99
3.27
0.31
0.00
0.30
-0.08
3.80
2.50
0.26
-0.26
0.55
-0.01
3.04
3.51
3.80
0.29
2.99
3.04
0.05
0.26
0.24
-0.31
0.10
0.29
0.28
0.18
-0.26
0.52
0.72
3.51
3.80
0.29
2.99
3.04
0.05
8%
8%
3%
9.25%
8%
8.30%
3%
9.30%
Notes:
I. The entire Plan Assets are managed by Life Insurance Corporation of India (LIC).
ii. The expected return on Plan Assets is as furnished by Life Insurance Corporation of India
iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and
other relevant factors.
46
34. Segment Reporting
The Company’s main business is manufacture of Gears & Gear Products. There are no separate reportable
segments as per Accounting Standard 17 (AS 17).
35. Disclosure in respect of Related Parties pursuant to Accounting Standard 18
a)
List of Related Parties
I.
Entity with Significant Influence
rd
th
Tube Investments of India Ltd (between 3 September, 2012 and 19 November, 2012)
II.
Holding Company
th
Tube Investments of India Ltd (with effect from 19 November, 2012)
th
III. Fellow Subsidiaries (with effect from 19 November, 2012)
a.
Cholamandalam MS General Insurance Company Limited
b.
Cholamandalam Investment and Finance Company Limited
I.
Cholamandalam Distribution Services Limited
ii.
Cholamandalam Factoring Limited and
iii.
Cholamandalam Securities Limited
(Subsidiaries of Cholamandalam Investment and Finance Company Limited)
c.
TI Financial Holdings Limited
d.
TICI Motors (Wuxi) Company Limited
e.
Financiere C10 SAS
I.
Sedis SAS
ii.
Societe De Commercialisation De Composants Industriels SARL and
iii.
Sedis Co. Ltd.
(Subsidiaries of Financiere C10 SAS)
IV.
Key Management Personnel (KMP)
Mr. P. Subramanian – Chairman and Managing Director (upto 3rd September, 2012)
Mr. Sreeram Srinivasan - President & Executive Director
rd
(with effect from 3 September, 2012)
Note:
Related party relationships are as identified by the Management and relied upon by the Auditors.
b)
During the year, the following transactions were carried out with the related parties in the ordinary
course of business:
` Crores
Transaction
Related Party
2012-13
2011-12
Sale of goods
Tube Investments of India Ltd
0.12
-
Management Fee
0.74
-
Reimbursement of Expenses
0.00
-
Receivable
0.03
-
Payable
0.66
-
47
c)
Details of remuneration to Key Management Personnel is given below:
Transaction
Related Party
rd
2012-13
` Crores
2011-12
Salary (Upto 3 September, 2012)
Mr. P Subramanian
0.10
0.24
Commission
Mr. P Subramanian
-
1.95
31-03-2013
31-03-2012
15.47
28.13
Basic
8,17,15,853
8,17,15,853
Diluted
8,17,15,853
8,17,15,853
Basic
1.89
3.44
Diluted
1.89
3.44
No remuneration is payable to Mr. Sreeram Srinivasan
36. Earnings Per Share
Profit After Tax (` Cr)
Weighted Average Number of Shares
Earnings per share of ` 1/-
Note:
Earnings per Share calculations are done in accordance with Accounting Standard 20 (AS 20) “Earnings per
Share”.
37. The working capital facility with State Bank of India is secured by hypothecation of Inventory, Book Debts,
Land & Buildings of A and C Units and certain items of Plant & Machinery. The working capital facility with
IDBI Bank is secured by an exclusive charge on certain items of Plant & Machinery.
38. Previous period figures have been re-grouped wherever necessary to correspond with the current years’
classification / disclosure.
Signatures to Notes to Financial Statements
M M Murugappan
Chairman
Firm Reg.No 006609S
S Lakshminarayanan
Partner
F-012024
C Subramaniam
Company Secretary
Sreeram Srinivasan
Chennai
th
30 April, 2013
48
L Ramkumar
Director
Registered Office : 304-A, Trichy Road, Singanallur, Coimbatore - 641 005
PROXY FORM
I/We ....................................................................................................................................................... of
....................................................................................................................................................................
............................................................................ being a Member / Members of Shanthi Gears Limited
hereby appoint ..........................................................................................................................................
................................................................................ of ...............................................................................
........................................................................ or failing him ....................................................................
................................................................................ of ...............................................................................
........................................................................ or failing him ....................................................................
................................................................................ of ...............................................................................
as my / our proxy to vote for me / us and on my / our behalf, at the Fortieth Annual General Meeting of
the Company to be held on Wednesday, the 24th July, 2013 at 2.00 p.m. and any adjournment thereof.
Signed this ......................... day of ..................... 2013
Affix
1 Rupee
Revenue
Stamp
Folio No.
:
DP ID No.
:
Client A/c No. :
No. of Shares :
Signed by the said .......................................................
Note : This form duly completed should be deposited at the Registered Office of the Company not later
than 48 hours before the commencement of the meeting
Fortieth Annual General Meeting
ATTENDANCE SLIP
Folio No.
:
DP ID No.
:
Client A/c No. :
No. of Shares :
Please complete this attendance slip and hand it over at the entrance of the Meeting Hall.
Only members or their proxies are entitled to be present at the Meeting.
Name and Address : ...................................................................................................................................
....................................................................................................................................................................
I hereby record my presence at Fortieth Annual General Meeting held at .................................................
....................................................................................................................................................................
Signature of the Members / Proxy* ............................................................................................................
* Strike out whichever is not applicable.
304-A, Trichy Road, Singanallur, Coimbatore - 641 005
www.shanthigears.com

Annual Report 2012-13

Transcription

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